Landowners have continued to hold back from marketing farmland amid economic uncertainty, with agents reporting a quiet first half of the year.
Michael Fiddes, Strutt and Parker’s head of estate and farm agency, said supply was ‘historically tight’ with 17,000 hectares publicly launched, the lowest area since 2014.
But Mr Fiddes said it was not unexpected, pointing to previous rounds of Common Agricultural Policy reform which led to a fall in the amount of land being marketed.
The biggest fall in volume was recorded in the East Midlands, with supply also below average in the East of England, West Midlands and Yorkshire and the Humber.
But the South West has bucked the trend, with supply up almost 50 per cent.
And tight supplies were helping underpin average values at £22,480/hectare (£9,100/acre) for arable land, Mr Fiddes said. However, the range in values was wide.
Farms and estates with the potential for mixed revenue streams were attracting strong interest, as were ‘best-in-class’ farms where neighbours were looking to expand.
Mr Fiddes said location remained critical, but buyers were putting more emphasis on quality.
In England, Savills director of national farms and estates Alex Lawson said some pragmatic sellers had applied ‘realistic pricing strategies’ and had been rewarded with decent levels of interest.
And the Welsh farmland market had been active with keen buyers looking for ‘the right farm’, according to Daniel Rees, associate director of farms and estates at Savills.
“The supply of new farms and land has been limited and so those that have entered the market have attracted good interest,” he said.
He added lotting had generated new interest to appeal to both lifestyle and agricultural buyers.
Knight Frank’s latest Scottish rural property update showed farmland values slipped 1.7 per cent in the first six months of 2019, but the hill land rose 3 per cent, supported by incentives to plant trees.
Andrew Shirley, partner and head of rural research, said: “Scotland’s government is strongly supportive of tree planting and attractive grants are available, making forestry an attractive investment proposition.”
He added with the emphasis on climate change this seemed unlikely to change.